Financial Quantitative Methods Coursework
Project: Risk, beta and rate of return within the CAPM and DGM in cheap
The purpose of this cheap essay is to conduct an analysis where students
use CAPM and DGM to analyse and calculate the required rate of return,
which is widely and empirically used in stock valuation.
In this cheap essay help, students are required to select a UK/USA stock
listed in London/New York stock Exchanges. The company must have paid
out dividend in the last 5 years. The selection should be confirmed by
the instructor. Students can perform this task individually or in pairs.
No Groups of three or more.
Students are to collect daily prices of the stock from Yahoo Finance!
along with the relevant market index (FTSE 100 for LSE and
S&amp;P500 for NYSE). Daily returns are to be calculated. The period
under study is 1/1/2012 to the most recent date.
In addition, students in cheap essay are required to collect Dividend
data from Yahoo Finance for their company for the period under study.
This is to calculate the (average) historical growth rate (g) which is
used in DGM.
Students will also need to calculate Sustainable growth rate (g) using
the formula g = ROE * (1- Dividend payout ratio). I suggest the
following website www.4-traders.com to get ROE and dividend
A list of
fundamental data will come up. You select the appropriate items needed
for the formula.
You are required to conduct an analysis in cheap essay help and
calculate required rate of return within the CAPM and DGM frameworks.
Students should provide an analysis of beta of their company by
calculating it on an annual basis to look into the trend and explaining
it potential determinants. Other variables included in both models are
to be estimated or borrowed from credible data sources.
You are required to write a report in cheap essay help of up of 4,000
words double spaced (Font 12 , Time New Roma) where you analyse the
results. 5% credit is allocated to writing style and grammar.
Suggested structure of cheap essay:
– Title should include the following “analysis of correlation and beta
of the listed company: (name of your company here).
– Introduction: explain what you intend to analyse in your report (5%)
– CAPM and DGM
– What is beta and its role? (5%)
– Presentation of the company (5%)
– Analyse beta for your company and compare it to competitors/industry
– Report and interpret descriptive statistics of return rate along with
(mean, standard deviation, variance, coefficient of variation,
– Calculation of rate of return using CAPM model (students should report
of risk-free rate and market risk premium; 20%)
– Calculation of growth rate of earnings (historical growth rate and
rate) used in DGM and calculation of required rate of return using DGM
– Conclusion: Compare the results from both models, and provide the
of both models. (5%)
The presentation should follow the same structure of the report with
greater focus on the analysis of the results. 10% of the mark of the
presentation is allocated to answering questions correctly. I recommend
three questions per student.
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